BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 210| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ UNFINISHED BUSINESS Bill No: SB 210 Author: Kehoe (D) Amended: 8/20/07 Vote: 21 SENATE TRANSPORTATION & HOUSING COMMITTEE : 7-4, 3/27/07 AYES: Lowenthal, Cedillo, Corbett, Kehoe, Oropeza, Simitian, Torlakson NOES: McClintock, Ashburn, Dutton, Harman SENATE ENV. QUALITY COMMITTEE : 4-2, 4/23/07 AYES: Simitian, Kuehl, Lowenthal, Steinberg NOES: Runner, Aanestad NO VOTE RECORDED: Florez SENATE APPROPRIATIONS COMMITTEE : 10-6, 5/31/07 AYES: Torlakson, Cedillo, Corbett, Florez, Kuehl, Oropeza, Ridley-Thomas, Simitian, Steinberg, Yee NOES: Cox, Aanestad, Ashburn, Dutton, Runner, Wyland NO VOTE RECORDED: Battin SUBJECT : Greenhouse gas emissions: fuel standard SOURCE : Author DIGEST : This bill requires the California Air Resources Board to adopt, implement, and enforce a low-carbon fuel standard by regulation to reduce the carbon intensity of transportation fuels in California. CONTINUED SB 210 Page 2 Assembly Amendments recast the bill in its current form. ANALYSIS : Existing Law 1.Under the California Global Warming Solutions Act of 2006 (CGWSA), requires the State Air Resources Board (ARB) to determine the 1990 statewide greenhouse gas (GHG) emissions level and approve a statewide GHG emissions limit that is the equivalent to that level, to be achieved by 2020. The ARB must adopt rules and regulations to achieve GHG emission reductions from sources or categories of sources, subject to certain requirements. 2.Under the Alternative Fuels Law, requires the California Energy Resources Conservation and Development Commission (CEC), in consultation with certain entities, to develop and adopt a state plan by June 30, 2007, to increase the use of alternative transportation fuels and set goals for 2012, 2017, and 2022 to increase alternative fuel use in the state that meet certain requirements. 3.Requires the Office of Planning and Research to be the coordinating entity in state government for environmental justice programs and defines "environmental justice" to be "the fair treatment of people of all races, cultures, and incomes with respect to the development, adoption, implementation, and enforcement of environmental laws, regulations, and policies." This bill enacts the Greenhouse Gas Emissions Fuel Standards Law that: 1.Requires the Air Resource Board (ARB) to adopt, implement, and enforce a LCFS by January 1, 2010 that achieves the maximum technologically feasible and cost-effective reductions in the carbon intensity of transportation fuels, at a minimum, the carbon intensity of transportation fuels shall be reduced by 10 percent by January 1, 2020, if technologically feasible and cost effective. CONTINUED SB 210 Page 3 2.Subjects all refiners, blenders, producers, and imports of transportation fuels to the LCFS, to the extent permitted by law. 3.Requires ARB to: A. Maintain or improve upon emissions reductions and air quality benefits achieved by the California Phase 2 Reformulated Gasoline Program as of January 1, 1999, including emissions reductions for all pollutants and precursors identified in the State Implementation Plan for ozone, and emissions of potency weighted toxics compounds and particulate matter, or maintain or improve upon emissions reductions and air quality benefits achieved by the stare's diesel fuel regulations. B. Ensure that activities undertaken pursuant to this article complement, and do not interfere with, efforts to achieve and maintain federal and state ambient air quality standards and to reduce toxic air contaminant emissions. C. Ensure that the LCFS is consistent with environmental justice, as defined in existing law. D. Account for greenhouse gas emissions on a full fuel-cycle basis to the extent that reliable information exists, as determined by ARB. ARB shall periodically update the methodology for quatifying greenhouse gas emissions on a full fuel-cycle basis. E. Avoid or mitigate to the maximum extent feasible significant environmental impacts, f any, associated with implementation of the LCFS, including avoiding or mitigating significant environmental impact from sourcing and producing fuels used to comply with the LCFS. F. Defines "full fuel cycle" to mean the production, extraction, cultivation, transportation, and storage of feedstock, the production, manufacture, distribution, marketing, transportation, and storage of fuel, and vehicle operation including refueling, CONTINUED SB 210 Page 4 combustion, conversion, and evaporation. 4.Requires ARB to update the regulations adopted pursuant to this bill as necessary to avoid or mitigate, to the maximum extent feasible, significant environmental and other impacts identified in a report required by this bill. 5.Requires ARB to coordinate the preparation of a multimedia evaluation pursuant to existing law for fuels a used to comply with the LCFS. 6.Requires ARB, by January 1, 2010, as part of the LCFS, to develop reporting requirements that include those factors necessary to quantify full fuel-cycle greenhouse gas emissions and environmental impacts of fuels subject to the LCFS. 7.Requires, by June 30, 2013, the State Energy Resources Conservation and Development Commission (CEC) to issue a report on the significant impacts of the LCFS and recommendations to mitigate those impacts, as specified. The report shall be updated and reissued every three years to take into account new information, scientific findings, or quantification methods. 8.Requires CEC to update and reissue, by June 30, 2010, a report required by existing law AB 1007, Chapter 371, Statutes of 2005, on how the state can increase the use of alternative transportation fuels. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: Yes According to the Assembly Appropriations Committee analysis moderate costs, in the range of $1.5 million spread over three years starting in 2007-08, to ARB to develop and enforce the LCFS, and to develop related environmental reporting requirements. To the extent ARB is already conducting some of these activities under an executive order issued by the Governor, these costs will reduces. Moderate one-time costs, $375,000 in 2008-09 and 2009-10, to the CEC to update its alternative fuels reports. Moderate General Fund costs, in the range of $180,000 in CONTINUED SB 210 Page 5 2012-13 an triennially thereafter, to the CEC to assess LCFS environmental impacts and to issue recommendations on how to minimize these impacts. SUPPORT : (Verified 9/10/07) American Federation of State, County and Municipal Employees American Lung Association of California California Association of Professional Scientists Coalition for Clean Air Energy Independence Now Environment California Environmental Defense Friends of the Earth/Bluewater Network Natural Resources Defense Council Planning and Conservation League Sierra Club California Silicon Valley Manufacturers Union of Concerned Scientists OPPOSITION : (Verified 9/10/07) California Chamber of Commerce California for Environmental Economic Balance California Independent Marketers Association California Trucking Association Southwest California Council Western States Petroleum Association ARGUMENTS IN SUPPORT : According to the author's office, AB 32 (Nunez) Chapter 488, Statutes of 2006, "aimed at reducing California's [GHG] emissions, provides direction and broad authority to the [ARB] to achieve the maximum in technologically feasible and cost-effective reductions in [GHG] emissions." The author's office notes that Governor Schwarzenegger issued Executive Order (EO) S-01-07 that calls for "a statewide goal to be established to reduce the carbon intensity of California's transportation fuels by at least 10 percent by 2020" and that this bill codifies this provision of the EO "making his directive binding under the law and clarifying that environmental and public health safeguards will be consistent with AB 32." CONTINUED SB 210 Page 6 ARGUMENTS IN OPPOSITION : The California Chamber of Commerce opposes this bill which interferes with the development of a competitive alternative fuels market and threatens job creation in California by creating a costly Low Carbon Fuel Standard that conflicts with the existing standard created by Governor's Executive Order 5-7-04. In order to meet increasing consumer demand, it is necessary that the fuels market is full of options and represents a mix of alternatives. However, unlike the Governor's Executive Order, this bill would limit the fuel technology providers could use to meet the ten percent reductions standards. Last year Governor Schwarzenegger signed into law the world's most sweeping legislation to control global greenhouse gas emissions, Assembly Bill 32. This groundbreaking legislation establishes a process for reducing greenhouse gas emissions and requires to development of a comprehensive plan in a balanced and expeditious manner, including encouraging the use of alternative fuels. The California Air Resources Board has been tasked with the duty to explore and develop regulations to achieve the reduction required under AB 32. This process is currently underway. SB 210 (Kehoe) however, ignores this planning and prejudges the outcome of AB 32 and the Governor's Low Carbon Fuel Standard as created in his Executive Order earlier this year. JJA:do 9/10/07 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED